A Welfare Evaluation of Green Urban Areas

Pierre Picard and Thi Thu Huyen Tran (thithuhuyen.tran@uni.lu)
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Thi Thu Huyen Tran: Department of Finance, Université du Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: (To consult this DP, please send an e-mail to dem@uni.lu) Urban green areas cover more than 6% of urban land in Europe. This paper quanti- fies the impact of urban green areas on city structures for more than 300 European cities. It discusses the economic effects of the local amenity produced by green urban areas using an urban economics model with various set of preferences. It estimates those models using data on detailed residential land uses, green urban areas and population density. It finally assesses the economic effects of reducing urban green areas in counterfactual exercises where cities are closed and open to migration and green urban land is converted to residential plots or not. By this strategy, the economic assessment accounts for the general equilibrium effects through endogenous land prices and residential space and location choices. It shows that the gross benefits of urban green areas are substantial. A uniform removal of half of the urban green areas is equivalent to 6-9% reduction of household annual income. However, the conversion of those areas to residential plots brings a net gain of approximately 4%.

Keywords: Urban green areas; urban spatial structure; land use policy; amenities; optimal locations; public facilities; structural estimation. (search for similar items in EconPapers)
JEL-codes: C61 D61 D62 R14 R53 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-agr, nep-env and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:20-21

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